Kuroda Negative Rate Bazooka Fizzles on Overnight Lending Freeze - InvestingChannel

Kuroda Negative Rate Bazooka Fizzles on Overnight Lending Freeze

“Japan’s banks have almost stopped lending to one another in the overnight market, threatening to undermine the impact of the central bank’s negative-rates stimulus. The outstanding balance of the interbank activity plunged 79 percent to a record low of 4.51 trillion yen ($40 billion) on Feb. 25 since Bank of Japan Governor Haruhiko Kuroda on Jan. 29 announced plans to charge interest on some lenders’ reserves at the monetary authority. Bond volatility has soared to a 2 1/2-year high as the evaporation of trading volumes in the call market dislocates funding of a range of debt investments.”